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Gold Today –New York
closed at $1,698.00 down $3.6 yesterday as a result of short covering. This
morning, Asian & London dealers lifted prices higher to reclaim the
$1,702 level. It was Fixed at $1,697.00 up $4 on yesterday’s Fix. In
the euro it was Fixed at €1,312.553 up €17.5 while the euro was
slightly weaker at €1: $1.2962 and weakening. Ahead of New York’s
opening, gold was $1,697.05 and in the euro at €1,309.25.

Silver Today –
Silver closed in New York at $32.98 yesterday. In Asia and London, silver
climbed back to reclaim the $33.08 levels. Ahead of New York’s opening
it stood at $32.88.

Gold (very short-term)

Gold is
expected to show a stronger bias, in New York today.

Silver (very
short-term)

Silver is
expected to show a stronger bias, in New York today.

Price Drivers

Gold & Silver – Confirmation
that the breakdown of supports in gold was caused by speculators and traders
came overnight, as short covering returned gold prices to $1,702 and silver
back over $33.08. Volumes were again small, demonstrating that neither the
market, nor fundamental perceptions have changed. We continue to expect large
long-term buyers from central banks and Asia to enter the market to buy at
these levels.

The fall in the
gold price in Indian Rupees to the Rs. 91,000 area
will bring Indian investors rushing in to get bargains. Western investors
rush in as prices start to rise as they ‘want in’ for the ride.
Indian investors rush in because they don’t think prices will go any
lower. Two very different worlds! But Indian demand is the larger in the gold
market, longer term. Indian gold
imports declined to 398 tonnes between April-October 2012 from 589 tonnes a
year earlier over the same period.

The main reason investors buy and
sell in different parts of the world differently, is that gold is
priced in the local currency in each market of the world. The weaker Rupee
during the year led to record Rupee prices for gold, whereas in the dollar
and the euro gold prices remained below their peaks. Understanding this is
always clouded by the fact there is no currency by itself that can measure
gold’s real value. Investors instinctively see prices in their own
currency and use that currency as the measure they understand. The common
denominator is gold itself, which a U.S. millionaire can sell to a farmer in
India [if he wants Rupees]. Likewise the farmer can sell that gold to an
American millionaire [if he wants dollars?].

Silver – Silver was riding tandem with gold as they both reclaimed the levels
investors feel they should be at overnight.